Positive Christmas news expected in M&S figures

Marks & Spencer is set to shrug off gloomy warnings from rival Next and show a long-awaited recovery in its clothing arm when it posts Christmas figures on Thursday.

The retail bellwether is expected by most analysts to eke out a 0.2% rise in third quarter sales across its general merchandise business, which would mark the division’s first sales growth since early 2015.

It would come despite City fears over the group’s festive performance after fashion chain Next warned on sales and profits after dismal Christmas trading.

Shares in M&S and Debenhams were hit hard as Next boss Lord Wolfson sounded the alarm over an “even tougher” 2017 for clothes retailers.

Clive Black at Shore Capital believes many of the woes at Next are “centred on company rather than market specific matters”.

He is predicting clothing sales at M&S in the range of minus 0.5% to growth of 0.5%.

Retail analyst Andrew Wade at Numis Securities is more optimistic and is forecasting clothing and homewares sales to rise by as much as 1%.

But he said much of this is down to the exceptionally weak performance from a year earlier, when sales in the division slumped by nearly 6%.

“M&S performed so poorly in clothing and homewares through the third quarter last year, we see a good possibility that the division reports a small positive LFL outcome this time.”

He added the result could also be helped by more favourable weather and the timing of Christmas, which has meant extra trading days versus a year earlier.

The firm’s food halls are set to see sales remain flat, according to Numis.

A recovery in the clothing business would be a welcome boost for M&S boss Steve Rowe and his team, even if it proves temporary.